Most money market accounts pay interest once a month. Federal rules do not require any specific schedule, so how often money market accounts pay interest comes down to your bank’s own policy, which will be spelled out in the account agreement you received when you opened the account. Some accounts credit quarterly, and a smaller number credit daily, but monthly is the industry norm.
What “Monthly” Actually Means
The date interest lands in your balance is tied to your statement cycle, not the first or last day of the calendar month. If your statement closes on the 15th, that is when the bank totals what you earned since the previous cycle and adds it to your available balance. Before that date, the interest exists as an internal calculation. You can watch it grow on your dashboard, but you cannot withdraw it until the crediting event posts.
Regulation DD, which implements the Truth in Savings Act, does not force banks to credit interest at any particular frequency.1Consumer Financial Protection Bureau. 12 CFR Part 1030 (Regulation DD) – 1030.7 Payment of Interest A bank is free to pick monthly, quarterly, or daily, as long as it discloses the choice to you.
Compounding vs. Crediting
Two different clocks run on your account, and it is easy to confuse them. Compounding is how often the bank calculates new interest on top of interest you have already earned. Crediting is how often the bank actually deposits that interest into your balance. Most money market accounts compound daily but credit monthly.
With daily compounding, the bank figures each day’s earnings using not just your original deposit but also the interest calculated the day before. By the time the monthly crediting date arrives, you have earned a small amount of interest on your interest. The account’s Annual Percentage Yield captures that full compounding picture, so two accounts with different compounding intervals can still be compared on equal footing.2eCFR. 12 CFR Part 1030 – Truth in Savings (Regulation DD)
The practical version: if your account compounds daily and credits monthly, your balance grows continuously in the bank’s ledger, but you only see the earnings hit your available funds once each cycle.
Finding Your Account’s Schedule
Every bank must provide a Truth in Savings disclosure before you open a money market account.2eCFR. 12 CFR Part 1030 – Truth in Savings (Regulation DD) The section labeled “Interest compounding and crediting” tells you exactly how often your bank calculates and pays interest. If you no longer have the paper copy, most banks post the disclosure in the legal or account-settings area of their online portal.
On the statement itself, look for a line labeled “Interest Paid” or “Interest Credit.” That entry shows the dollar amount added and the date it posted, which confirms the cycle is complete and the money is available to spend. If you see that entry appear on the same date each month, you have your answer.
Closing the Account Before Interest Is Credited
Timing matters if you plan to move your money. If you close the account before the next scheduled crediting date, you can lose whatever interest has built up since the last payment. Federal rules allow the bank to keep that accrued interest, as long as the bank disclosed the forfeiture policy in your original account agreement.2eCFR. 12 CFR Part 1030 – Truth in Savings (Regulation DD) The model disclosure language reads: “If you close your account before interest is credited, you will not receive the accrued interest.”
Partial withdrawals are treated differently. If you take money out without fully closing the account, the bank may delay paying accrued interest on the withdrawn amount until the next scheduled crediting date, but it cannot keep the interest.1Consumer Financial Protection Bureau. 12 CFR Part 1030 (Regulation DD) – 1030.7 Payment of Interest
If closing is on your agenda, do it right after an interest crediting date. Check your statement or online dashboard for the most recent “Interest Paid” entry to identify when the current cycle ends, and time the closure for the day after the next one posts.
Money Market Accounts vs. Money Market Funds
A money market account and a money market fund sound almost identical and follow completely different payment rules. A money market account is a deposit account held at a bank or credit union, insured by the FDIC or NCUA up to $250,000 per depositor, per institution, for each ownership category.3FDIC. Understanding Deposit Insurance Everything in this article—the monthly crediting norm, the Truth in Savings disclosure, the closure rules—applies to these deposit accounts.
A money market fund is a mutual fund that invests in short-term debt securities. It is not FDIC-insured and is regulated by the SEC rather than banking regulators. Money market funds typically distribute earnings as dividends, often monthly, but the payment terms in the fund prospectus control the timing, not a Truth in Savings disclosure. If you hold the product through a brokerage, you are almost certainly looking at a fund, not an account, and the schedule you care about is in the prospectus.